Outsourcing is becoming an increasingly popular option for businesses looking to cut costs without seeing a dip in quality. However, in case you’re still not convinced that it is a viable option, we’re here to show you some examples of companies that have successfully leveraged their way to success by outsourcing.
Alibaba’s one of the world’s biggest conglomerates today, but it probably wouldn’t have gotten this far if it didn’t outsource. Alibaba is a good example of outsourcing done right. Back when the company was starting out, founder Jack Ma wanted a website that would appeal to both domestic and foreign customers. Since China was in short supply of development talent at the time, Ma decided to outsource their web development to a firm in the US, and he got what he wanted. This was how they established the foundation of their multinational brand, and to this day, Alibaba has continued to outsource many of their projects.
Basecamp is one of the best-known examples of a company that has used outsourcing to its advantage. It used to be a web consulting company known as 37Signals, and the project management tool that we know today was just one of the company’s products. Eventually, they decided to make the app their sole focus, but the transition was anything but smooth sailing.
“As demand for our services grew, we found ourselves increasingly disorganized. You can get by without processes and systems for a while, but once you have a few plates spinning at once, you really have to get yourself organized, disciplined, and focused so you don’t drop any. Unfortunately, we began dropping some,” co-founder Jason Fried said. “We eventually hit a breaking point. We didn’t like the rag-tag image we were portraying to our clients. They were paying us good money — and our work was good — but the way we organized the work, communicated about the work, and presented the work wasn’t becoming. It was time to tidy up and get our shit together.”
That’s when Basecamp turned to outsourcing. To ease the load off of their team, they started to outsource their development work to remote developers. Today, Basecamp has made outsourcing its core business strategy.
GitHub’s now one of the largest code repositories today, but the company wouldn’t be where they are today if they didn’t hire Git expert Scott Chacon as an outsourced contractor.
While attending local Ruby on Rails meetups in San Francisco, co-founder Chris Wanstrath got to know Chacon, a developer with Reatrix Systems at the time. Preston-Werner knew that Chacon was the right person to compose the backend of Gist, a sharing feature inside GitHub. However, they didn’t have the funds to hire him full-time right away so they asked him to work as a consultant on an outsourced basis.
Chacon is now the Chief Information Officer of Github.
Yes, that’s right. I’m sure you’ve heard all about how Google takes good care of their in-house employees, but did you know that their contract workers actually outnumbered their direct employees? That’s right. Google outsources a lot of their projects.
Back in 2011, Google outsourced their customer support for AdWords to approximately 1,000 phone reps from 60 countries, and these workers were handling over 10,000 calls per week. So the company already knows a thing or two about the value of outsourcing when they stepped up their outsourcing strategy and hired IT firms to handle their IT infrastructure management, and software development and maintenance functions.
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Skype is one of the popular telecommunications applications today because of outsourcing. In 2003, founders Niklas Zennström and the Dane Janus Friis wanted to create a program where people could text, video call, and share files, pictures, and videos. But instead of doing it themselves, they decided to outsource the backend development of the platform to three Estonian developers that have also worked on the peer-to-peer file-sharing application Kazaa – Ahti Heinla, Priit Kasesalu, and Jaan Tallinn.
Just how valuable was Skype? Well, eBay bought Skype for $2.6 billion in 2005, and Microsoft acquired it in 2011 for $8.5 billion.
Flickr co-founder Stewart Butterfield knew that companies would love to have a communication and collaboration tool that offers a lot of classic IRC (Internet Relay Chat) features like channels, messaging, and private groups, but he thought something was lacking, so he enlisted design agency MetaLab’s help to design the app and the brand.
“In late 2013, Slack hired us to help them turn their early prototype into a polished product. We did the logo, the marketing site, and the web and mobile apps, all in just six weeks from start to finish. Apart from a few tweaks here and there, much of the product remains unchanged since the day we handed our designs off to the team at Slack,” MetaLab founder Andrew Wilkinson said.
Slack is now worth over $20 billion.
When founders Brian Acton and Jan Koum first started WhatsApp in 2009, it was full of bugs, and they knew they had to find a way to rise above the competition if they want to keep the company going. Acton and Koum didn’t have much capital at the time, so while WhatsApp continued to maintain an office in the US for customer service, they tried to keep costs at a minimum by outsourcing most of the development to a group of developers in Russia led by Igor Solomennikov. Solomennikov would later join the company as CIO.
WhatsApp was acquired by Facebook in 2014 for $19 billion.
These are just a few examples of businesses using outsourcing to drive growth. We can certainly learn a thing or two from these companies. Outsourcing can do so much more than just cut costs. Alibaba, Basecamp, GitHub, Skype, Slack, and Whatsapp, have all used outsourcing to fill skills gaps. Even Google, one of the world’s biggest companies, has continued to use outsourcing as a tool to help them achieve their goals.
The most successful companies in the world outsource, so perhaps you should as well. If you’re looking to ease the load off of their team, check out OnlineJobs.ph. It’s the largest online job marketplace in the Philippines.
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